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© Abundance 2023
The privatised water system in England and Wales is now so dysfunctional renationalisation is firmly on the political agenda. At this critical crossroads, with failed private ownership behind us and public ownership heavily signposted, we argue that a new route must be taken towards the social control of water - a model others are already forging. Our new briefing paper aims to influence the debate about the ownership and control of water in the UK. It reviews four different international experiences, and calls for the development of a new model of social control.
The US private equity group KKR recently withdrew its bid to acquire and recapitalise an effectively bankrupt Thames Water. Few buyers are willing to pay a 'market price' for a company whose assets are in a dismal state of repair, and whose debts reflect the vast wealth already extracted by its shareholders.
Recently reported negotiations to guarantee future owners would be ‘granted immunity from prosecution for serious environmental crimes’ demonstrate the unviability of managing a functioning water utility whilst also extracting private profit. Taking Thames Water into special administration appears an increasingly inevitable outcome.
Public ownership - which should more accurately be called state ownership - might prove to be a necessary first step in taking back control of that which we need to live well. But history proves that state ownership offers us no guarantees that shareholder profits won’t once again be prioritised against the common interest.
In June 2008, the Royal Bank of Scotland (RBS) came within hours of having to halt cash withdrawals from its ATMs as it fell into bankruptcy. The UK government immediately stepped in with a £20bn bailout, which soon rose to £45.5bn. In return the government acquired an 84% ownership stake in the bank.
17 years later, in May 2025, the last government shares were sold to private investors at an overall loss to the taxpayer of £10bn. While Fred ‘the shred’ Godwin, the CEO whose policies brought RBS to effective bankruptcy, was stripped of his knighthood he is still in receipt of an RBS pension worth an estimated £600,000 a year.
This is far from an isolated incident. Within the financial sector we could tell a similar story about Northern Rock. Outside it we could point to the East Coast Mainline train franchise. In every case, the re-capitalised services were returned into private ownership, at great financial cost to the British public.
“...nationalisation has been treated as a process to restore profit to the shareholders, at our expense.”
Time and again, state ownership has failed to guarantee our long-term common interests. Instead, nationalisation has been treated as a process to restore profit to the shareholders, at our expense. This is a political choice. It’s time for the British public to exercise social control over their public services, and to ensure they serve the common interest.
Temporary ownership is far from the only form of entanglement between the state and the private sector. Even excluding the bailouts of train companies, ongoing state subsidies to private train operators are, in real terms, around twice what they were before privatisation.
When we take into account the outsourcing of public services to private providers; the vast scale of public-private partnerships in which the state derisks private profit; and the vital role that favourable government regulation plays in the profitability of most business models, then the supposedly clear distinction between the state and the private sector begins to look illusory.
Over the last few decades the way public resources, assets, and services have been run has prioritised the needs of private capital over any notion of the public or common good. Water services have been turned into opportunities for the already super wealthy to funnel huge rents and dividends into their pockets.
This kind of systematic state support of the private sector has been a key driver in the massive increase in inequality with extreme wealth at the very top. We are increasingly finding this scale of inequality incompatible with democratic government as it’s currently structured. This isn’t just about water – it’s about the foundations of a fair and democratic society.
While ownership is important, it is control that matters most in determining how an asset is run and who benefits from it. Just think about those pension funds, technically owned by workers, but controlled by asset managers and invested in ways that often undermine the longer-term interests of the workers involved.
Indeed, there is a long history of the state managing assets in a near identical manner to private actors after a process of elite capture – from the UK’s post-war National Coal Board’s appointment of Lord Hindley, former managing director of a private colliery, to the rollout of New Public Management techniques across the public sector. In every case, the logic of private capital still determines how public assets get managed and investment decisions get determined.
If we want to avoid the pitfalls of the past, we must take a different path. Whilst state intervention is necessary, state ownership is not enough. The key to ensuring that public services truly serve the common interest, as well as to future proof against reprivatisation, is to establish and embed mechanisms of social control.
Unlike simplistic calls for ‘public’ ownership which see state ownership as a solution in itself, social control demands a more nuanced approach to questions of ownership and decision-making. There is no one-size-fits-all approach.
Social control of public assets, resources, and services, which involves some level of deliberative democratic governance, is vital if we are to undo the anti-democratic impact of extreme wealth. This isn’t about consultation, or periodic processes of participation. Social control is about ensuring that services that are foundational to our collective wellbeing are subordinate to our common interest. This requires embedding mechanisms of popular democratic discussion and decision-making at the core of how public utilities are managed, enabling collective democratic power over themes such as: the setting of rates, infrastructure investment, social prioritisation in conflicts over access to water, and defining wider social goals that a public water utility could help to fulfil.
To understand what social control can look like in practice, we’re publishing a briefing that looks at four different attempts to establish social control of water. Two of these cases (ABC Napoli and the Terrassa Water Observatory) have been realised, one of them was shelved due to changing political realities (K136 Thessaloniki) and one of them was realised only in a significantly compromised form (the proposal of the Cochabamba Coordinadora). Each experience provides insights into some of the possibilities and challenges of attempting to establish the social control of water.
These cases don’t offer us an off-the-shelf model for how we might structure the social control of Thames Water. None of them have advanced a model that is without its limitations and challenges. However each of them has sought to directly build from the experiences of those who have come before them.
What all of these cases demonstrate is that resisting privatisation is not enough. And nor is the limited goal of state ownership. A water utility that truly serves the British public requires a new approach to the social control of water. This means continuing in the tradition of the examples profiled, building relationships and learning from the concrete experiences of these and other attempts that have endeavoured to socialise water before us.